The court established that an Employer's failure to fulfill contractual obligations can invalidate penalties imposed on a contractor for delays, emphasizing fairness in administrative decisions.

Order :

S.Chandrashekhar, J.

The challenge laid by M/s. Mewar Associates through its Proprietor is to the judgment dated 18^th September 2019 passed in Case No.144/2018 (Original Suit).

2. On the basis of the pleadings of the parties, the following issues were framed by the Commercial Court: (1) whether the claimant is entitled for damages to the tune of Rs.16,02,249/- with interest due to delay and failure on the part of the opposite party, (2) whether the decision of the Empowered Standing Committee dated 7^th December 2012 is liable to be interfered with on the ground that the claimant was not provided an opportunity of hearing, (3) whether the suit is barred by limitation, (4) whether the Court has jurisdiction and power to entertain the suit and (5) whether relief can be granted to the claimant. On the issue of loss caused to the M/s. Mewar Associates (hereinafter referred to as the appellant-firm) to the tune of Rs.16,02,249/-, the Commercial Court held that no supporting evidence was produced by it except some letters relating to acquisition of land. As regards the decision of the Empowered Standing Committee dated 07^th December 2012, the Commercial Court came to a conclusion that the appellant-firm was given an opportunity of hearing and that is the reason it had the knowledge about the said decision. The issues of limitation and jurisdiction were decided by the Commercial Court in favor of the appellant-firm.

3. Mr. Manoj Bhandari, the learned Senior Counsel appearing for the appellant-firm has raised manifold contentions to criticize the judgment dated 18^th September 2019. One of the submissions made on behalf of the appellant-firm is that the Administrative Engineer (in short, “Employer”) did not provide full stretch of the land on which irrigation canal was to be constructed. Another substantial ground urged on behalf of the appellant-firm is that there is no discussion about the documentary evidence laid on behalf of the appellant-firm as to acquisition of a part of the subject land and that has, therefore, resulted in an erroneous decision by the Commercial Court at Udaipur. Mr. Manoj Bhandari, the learned Senior Counsel for the appellant-firm has also referred to various documents concerning land acquisition, investigation report dated 14^th December 2007 and communication from the Executive Engineer dated 19^th March 2007 to challenge the decision of the Commercial Court rendered in Case No.144/2018 (Original Suit).

4. On the other hand, Mr. Sajjan Singh Rathore, the learned Additional Advocate General submits that it is not a fact that the possession of the land was not given to the appellant-firm rather there was some dispute as to payment of compensation to the land holders which had nothing to do with the execution of work by the appellant-firm. The learned Additional Advocate General would further submit that the appellant-firm had not carried any construction over Chain 0 to Chain 40 which was unhindered and the possession thereof was already handed over to the appellant- firm. The learned Additional Advocate General has referred to clauses 2 and 3 of the conditions of contract to support the decision rendered by the Commercial Court.

5. Briefly stated, the Canal work from 0.0 km to 1.9 km and CD works at Amarpura projects were awarded to the appellant-firm the total contract value of which was Rs. 98,67,614/-. Pursuant to work order dated 16^th December 2004 issued in favour of the appellant-firm, an agreement was executed under which the scheduled completion period for the work under contract was 24^th December 2005. However, the subject Canal work was not completed by 24^th December 2005 and an order extending the period for completion of the work till 30^th June 2006 was issued on 31^st March 2006. A second